American Woodmark: Good Long-Term Prospects And Cheap Valuation Make It A Buy

Alpha Mantra
254 Followers

Summary

  • American Woodmark's financial performance has been mixed, with revenue declining but margins expanding in the last 2 years.
  • In the near term, AMWD should witness a headwind from both R&R and new housing end market due to weak macroeconomic conditions.
  • However, strong underlying demand trends in both R&R and the new housing end market should support the company's long-term growth.
  • AMWD stock is undervalued on a historical as well as relative basis, presenting a buying opportunity.

Home kitchen interior

Tony Anderson

Investment Thesis

Over the last two years, American Woodmark's (NASDAQ:AMWD) financial performance has been mixed, with the revenue declining due to weak end-market demand and margins expanding due to subdued inflationary pressure and better pricing. Looking ahead, performance in the

This article was written by

254 Followers
I am a value focused investor, conducting fundamental research on sectors like but not limited to chemicals, homebuilders, building materials, industrials and metals & mining. I prefer to invest in stocks which are cheaply available and have a catalyst in the near future. My investment horizon ranges from a quarter to two years. I have over 3 years of active investing experience and served as buy side analyst at boutique research firm and family offices.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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